NEW YORK, June 7 (Reuters) - The dollar rose and globalequity markets rallied on Friday after U.S. jobs data for Mayquashed investors' concerns that the Federal Reserve would soonstart easing back on its stimulus program.

Still, investors are coming around to the notion that theFed would begin to reduce its bond buying in support of theeconomy, perhaps as soon as September. The program has beeninstrumental in pushing stocks to successive highs since March.

Employment outside the farming sector in the world's leadingeconomy rose by 175,000 last month, just above the medianforecast in a Reuters poll, Labor Department data showed.

The unemployment rate ticked one-tenth of a percentage pointhigher to 7.6 percent, a relatively hopeful sign as it wasdriven by more workers entering the American labor force.

Stocks on Wall Street jumped more than 1 percent, followinggains in Europe on the news, while the dollar rose against theeuro and crude oil rebounded from early losses.

For the week, the Dow rose 0.9 percent, while the S&P gained0.8 percent and the Nasdaq 0.4 percent.

The dollar recovered its sharp losses from the previoussession, beaten down by expectations of a downbeat figure beforethe release of payrolls report.

The euro fell to the day's lows against the dollarafter the jobs report, touching a session low of $1.3193 and waslast at $1.3219, down 0.2 percent.

Against the yen, the dollar gained about 0.55 percentto 97.47.

"This will calm some of the volatility in the markets, aspeople were very concerned about an aberrational number inparticular being too strong and how that would aggressively movethe Fed's disposition in terms of tapering," said Rick Rieder,co-head of Americas fixed income at BlackRock in New York.

But volatility is likely to pick up because of news incoming weeks about European growth, U.S. economic data andJapan's direction, he said. The Fed may begin to scale back itsasset purchases moderately some time around September, in linewith market expectations, Rieder said.

German Bund futures pared gains and U.S. government debtfell in choppy trade on the view the U.S. payrolls data was notenough to hasten a scaling back in Fed stimulus.

Benchmark 10-year U.S. Treasury notes were down28/32 in price to yield 2.179 percent.

Bund futures initially fell as low as 143.25 beforerecouping those losses in rocky trade, to settle down 6 ticks at143.39.

U.S. Comex gold futures for August delivery settleddown $32.80 an ounce at $1,383.00.

Brent futures rose above $104 a barrel, supported byexpectations of ongoing U.S. economic stimulus, putting thecontract on course for its biggest weekly gain since late April.